In the course of 1974, tensions and conflicts persisted in Asia and the
situation at large continued to be unstable. Against this background, moves
toward opening dialogues between countries with different political systems,
which started gradually following the Sino-American rapprochement and the
normalization of relations between Japan and China, showed some progress.
Whereas hostilities in the Indochina Peninsula and tensions in the Korean
Peninsula continued, there was progress in relations between Japan and China,
and Malaysia established diplomatic relations with China.

The Indochina situation changed quickly after the turn of 1975, and the Asian
situation assumed a new aspect with the formation of governments by Communists
in Vietnam and Cambodia in April.

There are many difficulties blocking the way for achieving political
stability in Asia because many Asian countries have complex social backgrounds
such as the diversity of race, religion and language, their economic foundations
have not yet been fully established and they lack a sense of solidarity as an
Asian region as a whole. The massive change in the world economic situation
ensuing from the oil crisis has also seriously affected the economies of these
countries.

Japan, hoping for lasting peace and stability in Asia, carried out abroad
range of diplomatic activities from the standpoint of making maximum
contributions to that end, while taking into account the conditions of the Asian
region. Namely, Japan made efforts in further improving the quality and quantity
of its economic cooperation and actively extended bilateral and multilateral
cooperation in order to contribute to the self-reliant nation-building endeavors
of the Asian countries. Furthermore, responding to the diversified and fluid
Asian situation, Japan continued efforts in implementing its policy of securing
stable relations, as much as possible, with all countries of Asia, including
those with different political systems. These efforts can be illustrated, among
other examples, by the progress made in talks concerning the opening of
embassies following the establishment of relations with the Democratic Republic
of Vietnam and the conclusion of various agreements with China.

Japan welcomes the fad that moves to strengthen the solidarity of Southeast
Asia through ASEAN, aimed at the common objective of creating stability and
prosperity in the region, have intensified in recent years. Japan places much
importance on such efforts on the part of the Southeast Asian countries made at
their own initiative and is watching with expectations the future growth of the
said organization.

As for criticisms against Japan in some Asian countries which have emerged in
recent years attendant to the overseas activities of private Japanese
enterprises, Japan held thoroughgoing talks with the governments of the
countries concerned and has been making, with the cooperation of private
Japanese enterprises, efforts under its long-term policy of promoting business
activities truly welcomed by host countries.

In 1974, Japan promoted mutual understanding at various levels with other
Asian countries by dispatching, for example, the Ship for Southeast Asian Youth
(in October) and organizing the Second Reunion of Southeast Asian Graduates from
Japanese Universities (in November).

(2) Korean Peninsula

(A) The year 1974 opened for Japan-Republic of Korea relations with the
friction over the abduction of Mr. Kim Dae Jung in the preceding year still
unsettled. In April, two Japanese students were arrested on a charge of
violating emergency Presidential measures. Moreover, an attempt on the life of
President Park by a Korean residing in Japan in August caused large-scale anti-Japanese demonstrations in the Republic of Korea. Early in September,
demonstrators attacked the Japanese Embassy in Seoul and tore down the Japanese
flag. Thus, 1974 was quite an eventful year, and the two countries failed to
hold their annual ministerial conference. The reactions in both countries to the
two incidents vividly showed the difference in the situation of the two
countries and underlined the difficulty of adjusting their relations.

However, the anti-Japanese sentiment in the Republic of Korea calmed down as
a result of the visit by former Foreign Minister Estusaburo Shiina as a special
envoy in mid-September. In February 1975, the two Japanese students charged with
violating the emergency measures whose appeal to the Supreme Court of the
Republic of Korea had been pending, returned home as a result of a measure taken
by the ROK Government " in consideration of friendly Japan-ROK
relations" ,thereby removing one cause of the frictions in the relations
between Japan and the Republic of Korea. Following the two incidents mentioned
above, the Japanese Government called particular attention of Japanese visitors
to the Republic of Korea to the situation in that country (it called on people
to refrain from making non-essential trips to the Republic of Korea following
the attack on the Japanese Embassy), but this appeal was withdrawn in February
1975. Thus, Japan-ROK relations, which had taken a turn for the worse throughout
1974, gradually headed toward improvement.

The troubles in Japan-ROK relations in 1974 also affected the interchange
between the two countries in the economic field. Although it must be noted that
two-way trade between Japan and the Republic of Korea exceeded the $4,000
million mark and showed an increase of 42 per cent over the preceding year amid
the accelerated global recession caused by the oil crisis, private Japanese
investments in the Republic of Korea decreased sharply after August, and such
investments in the whole of 1974 were only a third of the level of the preceding
year. At the Government level, the Japan-ROK Trade Committee held a meeting in
October, and Japan offered technical cooperation, including the acceptance of
trainees and the dispatching of experts, as in normal years. As for financial
cooperation, however it was limited to the conclusion of formal agreements for
commitments pledged in the preceding year, including a \31,300 million credit.
No new pledge had been made by the end of March 1975.

(B) Although Japan has no diplomatic relations with North Korea, the
interchange between the two countries in such fields as culture, sports and
economy has expanded considerably in recent years. Their two-way trade in 1974
more than doubled from the preceding year to about $360 million. A North Korean
parliamentary delegation visited Japan to attend the plenary meeting of the IPU
(Interparliamentary Union) held in Tokyo in October.

(3) China

(A) Setting Framework for Relations

Since the normalization of relations with China, Japan made efforts for
promoting the conclusion of agreements with China on trade, civil aviation,
shipping and fisheries to lay the foundation for the interchange of people and
goods and various kinds of relations between the two countries. As a result, the
Japan-China trade agreement was signed by Foreign Minister Ohira and Foreign
Minister Chi in Peking on January 5,1974. Thus, trade between Japan and China
was placed on a long-term and stable foundation.

As for the civil aviation agreement, leaders of Japan and China exchanged
views on the occasion of Foreign Minister Ohira's visit to China early in 1974,
following preliminary negotiations in 1973. Later, Japanese Government officials
from competent authorities visited China on March 21 and, after almost one month
of negotiations, the civil aviation agreement was signed on April 20. As a
result, a regular air route was opened between the two countries on September
29, 1974, which was the second anniversary of the normalization of Japan-China
relations, thereby cutting travel time between Tokyo and Peking from two days to
about five hours. Thus, travel between the two countries became remarkably easy.

As regards the shipping agreement, a Chinese delegation visited Japan and
conducted negotiations in Tokyo from July 8 to August 1, 1974, under drafts
exchanged in 1973, and the two countries later worked out technical details,
including the wording of provisions of the agreement in Peking. As a result, the
agreement was signed on November 13 between Vice Minister for Foreign Affairs
Togo and Vice Minister for Foreign Affairs Han who visited Japan.

Concerning the fisheries agreement, the last of the agreements scheduled to
be concluded under the Japan-China Joint Communique, negotiations were held in
Peking from May 24 to June 20, 1974, between the delegations of both countries.
However, they failed to reach agreement and, after a temporary suspension,
negotiations were resumed in Tokyo on March 1, 1975. Thus, three of the four
proposed agreements were concluded in 1974, and efforts for establishing a
framework for the relations between Japan and China made great progress.

(B) Japan-China Treaty of Peace and Friendship

As their relations made progress, the time arrived for the two countries to
open negotiations for concluding a treaty of peace and friendship as provided in
Paragraph 8 of the Japan-China Joint Communique. Preliminary talks concerning
the conclusion of the treaty were held between Foreign Vice Minister Togo and
Foreign Vice Minister Han on the occasion of the latter's visit to Japan in
November 1974.

(C) Promotion of Inter-governmental Dialogue

The dialogue between the
governments of Japan and China has made steady progress since the normalization
of their relations, and mutual visits by high-ranking officials increased in
1974 as part of the dialogue. Japanese Foreign Minister Ohira's visit to China
early in 1974 and Chinese Foreign Vice Minister Han's visit to Japan in November
were typical examples. On these occasions, the governments of Japan and China
agreed to broaden the scope of their dialogue in the future.

(D) Promotion of Various Kinds of Interchange

In addition to the efforts mentioned above, Japan endeavored to promote
interchange in various areas at governmental and private levels out of the
recognition that deepening of mutual understanding is essential to the promotion
of friendly relations between the two countries. As part of such efforts, a
Government-sponsored scientific and cultural mission, headed by Kojiro
Yoshikawa, professor emeritus at Kyoto University, visited China in March 1975.

(4) Indochina

Among Japan's diplomatic activities with respect to Indochina in 1974, the
following can be mentioned as salient features.

(A) Emergency Relief

Japan appropriated in its fiscal 1974 budget \12,000 million for grant
assistance to Indochina, maintaining the level of grants made in fiscal 1973,
from the standpoint of offering assistance, commensurate with Japan's means, for
postwar reconstruction and the development of Indochina. From this budgetary
fund, Japan has so far contributed $3,600,000 (about \1,100 million) to Laos's
Foreign Exchange Operation Fund (FEOF), $7 million (about \2,100 million) to
Cambodia's Exchange Support Fund and \600 million (about $2 million) to the
Indochina Operational Group (IOG) (later changed to the Indochina Bureau) of the
International Red Cross. The IOG has been carrying out relief activities for
the refugees and other war victims in Indochina. The areas covered by IOG
operations include those controlled by the Provisional Revolutionary Government
of South Vietnam and the Royal Government of the National Union of Kampuchea.

(B) Negotiations with the Democratic Republic of Vietnam

Following the establishment of diplomatic relations between Japan and the
Democratic Republic of Vietnam (North Vietnam) on September 21, 1973, Japan held
talks in Vientiane, Laos, with representatives of the North Vietnamese
Government for the establishment of embassies and grant aid from Japan to North
Vietnam. Following the basic agreement reached in March 1975, a North Vietnamese
economic mission visited Japan toward the end of March and held talks to
materialize the grant aid from Japan estimated at \5 ,000 million for the time
being.

(C) Cambodia Problem at the United Nations

Taking the basic stand that the Cambodia problem should be settled by the
Cambodians themselves in a peaceful manner without outside intervention, Japan,
in close consultation with other Asian and Pacific nations, promoted in the U.N.
General Assembly in the autumn of 1974 a resolution having as its objective the
peaceful settlement of the Cambodia problem. The resolution was adopted by a
vote of 56 to 54 with 24 abstentions.

(5) Five ASEAN Nations and Burma

Friendly relations between Japan and the Southeast Asian countries grew even
closer in 1974 through Prime Minister Tanaka's visits and also visits to Japan
by high-ranking officials of these countries. However, as relations became
closer friction surfaced and measures to cope with it were considered. It can be
said that 1974 was a year which saw new winds coursing through the relations
between Japan and these countries.

(A) Prime Minister Tanaka's Visits

To further promote good neighborly relations with those countries with which
Japan shares peace and prosperity, Prime Minister Tanaka made official visits to
the five ASEAN countries in January and Burma in November and strengthened
relations of friendship and goodwill by exchanging views with the leaders of
these countries.

(B) Promotion of Dialogues

Japan vigorously promoted or supported such projects as the
Japan-Philippine
Joint Committee on Economic Affairs, the Japanese-Indonesian Conference and the
Southeast Asian Youth Ship, from the viewpoint that it is important to have
broad contacts in order to promote mutual understanding between Japan and the
Southeast Asian countries.

(C) Harmony in Economic Relations

These countries, especially those which do not produce oil, were strongly
affected by the oil crisis and global inflation, and they made various requests
to Japan in many aspects of economic relations, such as economic cooperation,
business activities, private investments and the supply of intermediate raw
materials. Japan offered various kinds of cooperation, including commitments to
extend yen loans to Indonesia, Malaysia, Burma and the Philippines, from the
standpoint of maintaining and promoting friendly relations.

(6) Southwest Asia

Good relations have been maintained between Japan and Southwest Asian
countries on the basis of progress made both in economic relations and in
economic and technical cooperation. Japan hopes for the maintenance and
promotion of friendly relations with all countries of Southwest Asia and intends
to cooperate to the greatest extent possible for the stability and development
of that region. On the basis of this thinking, Japan made the following major
diplomatic efforts in 1974.

(A) In relations with India, the ninth Consultative Meetings of the officials
of the Japanese and Indian Foreign Ministries were held in New Delhi in
November. In the same year, Japan promised to extend the 14th Yen Credit of
\7,000 million in goods and \11,000 million in projects and also agreed to
reschedule the repayment of debts totaling about \12,100 million.

(B) In its relations with Pakistan, Mr. Aziz Ahmed, Minister of State for
Defense and Foreign Affairs, visited Japan as a Government guest in December
1974 and ways to promote relations between Japan and Pakistan were discussed. In
June 1974, Japan pledged to extend its 11th Yen Credit of \6, 200 million and,
in March 1975 , it promised to release Pakistan from its liability for debts
amounting to \24, 500 million under project loans in former East Pakistan.

(C) In its relations with Bangladesh, the Government dispatched the Japanese
Government Economic Mission headed by Shigeo Nagano, president of the Japan
Chamber of Commerce and Industry, to Bangladesh in January. Japan pledged to
extend its first Yen Credit of \9,000 million in goods in March 1974 and its
second Yen Credit of \11,500 million in goods in March 1975. Besides, Japan
promised to supply machines and materials worth about \2,100 million as grant
aid by March 1975. It also promised to supply rice worth about \3,200 million in
KR food aid by March 1975.

(D) In its relations with Sri Lanka, Japan pledged to extend a ninth Yen
Credit of \4,200 million and made a grant of \60 million for the purchase of a
training fishing boat.

(E) In its relations with Maldives, Japan promised a grant of \150 million
for a project to motorize fishing boats.

(F) In its relations with Nepal, Japan promised \107.8 million in KR food aid
in October 1974.

(7) Oceania

As for relations between Japan and Australia and New Zealand, Prime Minister
Tanaka made official visits to the two countries late in October through early
November, which greatly contributed to broadening relations between Japan and
those countries. Japan and Australia held negotiations for the conclusion of a
treaty commonly known as the NARA Treaty (Nippon-Australia Relations Agreement),
which would provide for the basic relations between the two countries. In the
South Pacific region, developments in Papua-New Guinea, which achieved self-government in December 1973 and was on the eve of independence received
attention. In January 1975, Japan established a consulate general in Port
Moresby , the capital of Papua-New Guinea. Japan also promoted broad friendly
relations with other island countries in the South Pacific region (Fiji, Nauru,
Tonga and Western Samoa) through political and economic interchange and person-to-person contacts.

2. North America

(1) The United States

(A) Prime Minister Tanaka's Visit

Prime Minister Tanaka stopped over in Washington on September 21, 1974,
during his tour of Central and South America and Canada, and met with President
Ford. The talks materialized because both sides believed that it was desirable
for the top leaders of the two countries to become acquainted as soon as
possible in the new situation brought about by the formation of the Ford
Administration on August 9. The two leaders exchanged views on the general
prospects of broad Japan-U.S. relations and confirmed that Japan-U.S. relations
were a major foundation stone of the foreign policies of the two countries and
that there was a need for Japan and the United States to cooperate on important
world economic problems, such as energy and currency. It was very significant
that the leaders of the two countries met personally about a month and a half
after President Ford's inauguration and exchanged views in an informal
atmosphere, as part of the "constant dialogue" going on between Japan
and the United States over the past several years. It can be said that relations
of friendship and cooperation between the two countries, based on "Japan-U.S.
relations in a global perspective , " have gained further breadth and depth
through such talks.

(B) President Ford's Visit to Japan

President Ford accepted the Japanese Government's invitation to visit Japan
soon after his inauguration on August 9 and visited Japan from November 18 to
22. While staying in Japan, the President met with Their Majesties the Emperor
and Empress at the Imperial Palace, attended a Palace banquet and held summit
talks twice with Prime Minister Tanaka. He also energetically participated in
various functions ,including a sightseeing tour of Kyoto, thereby making his
historic visit to Japan very fruitful.

It was the first time in more than 100 years of friendship between Japan and
the United States that an American President in office had visited Japan, and
this fact itself was very significant and epoch-making. President Ford's visit
to Japan was his first tour abroad and it can be said that it reflected the
newly formed Ford Administration's attitude of attaching importance to Japan.

As for the results of President Ford's visit to Japan, firstly, in the area
of protocol, His Majesty the Emperor who is the symbol of the State and of the
unity of the people had an opportunity of talking personally with President Ford
five times , beginning with the welcoming ceremony at the Akasaka Palace (state
guest house) which was followed by their talks, the Palace banquet, President
Ford's banquet and the farewell ceremony. These functions were reported in
detail and aroused great interest among the peoples of the two countries. This
was a most welcome development in the furthering of goodwill between the two
nations. Another significant result was that President Ford renewed the
invitation to His Majesty the Emperor on the occasion of their talks to visit
the United States, and that His Majesty's visit to the United States, a matter
which had been pending for some time, was finally decided*.
President Ford
deepened his understanding of Japan and of the Japanese people through his
contacts with people of various circles at many functions. The President not
only greatly impressed those who came into contact with him with his frank and
honest personality, but also charmed the Japanese people through the press and
television. This fact will long remain as a valuable asset in the relations of
friendship and goodwill between the peoples of the two countries."

The most important result in the area of substantive relations was the
exchange of views in depth at the summit level and also at the Foreign Minister
level. There were two rounds of summit talks for a total of about three hours.
Foreign Minister Kimura and Secretary of State Kissinger held talks three times
for a total of more than six hours- once during President Ford's stay in Japan,
the second time when Secretary Kissinger passed through Japan on his way from
Vladivostok to China after President Ford left Japan and the third time when he
stopped over in Tokyo on his way home from China.

At these talks, both sides confirmed that the maintenance of friendly
bilateral relations was important for both countries and views were exchanged on
international problems and pending bilateral matters. As for international
problems , both sides devoted considerable time to a discussion of the energy
problem and the Middle East situation which were immediate matters of great
concern to both governments. Especially, both sides took up the energy problem
repeatedly and discussed ways to promote cooperation among the energy-consuming
countries, a subject which had made great progress since the Washington
Conference in February 1974, and how to promote cooperation between the
producing and consuming countries.

As for bilateral problems, the talks took up such subjects as the nuclear
problem, fisheries, exports of American agricultural products to Japan and the
suspension of imports of beef by Japan. When Prime Minister Tanaka explained the
special circumstances in Japan concerning the nuclear problem (such as the
national sentiment against nuclear weapons and the three non-nuclear principles)
and sought the understanding of the United States of this situation, President
Ford stated to the effect that the United States had a deep understanding of the
Japanese people's special sentiment and that it would faithfully carry out its
various commitments under the Japan-U.S. Security Treaty. On the problem of
exports of American agricultural products to Japan which is closely related to
the everyday life of the Japanese, President Ford reiterated that the United
States would continue supplying Japan with adequate supplies of agricultural
products.

Thus, at the Japan-U.S. summit talks as well as at the talks between the
Foreign Ministers of the two countries on the occasion of President Ford's visit
to Japan, views were exchanged in depth not only on various problems pending
between Japan and the United States, but also on the roles to be played by each
to solve international political and economic problems, which are of mutual
concern to the two countries, from the standpoint of " Japan-U.S. relations
in a global perspective. " It was very significant that the joint
communique issued at the close of the summit talks clearly spelled out various
principles that would regulate future Japan-U.S. relations from such a broad
point of view.

(2) Canada

(A) Prime Minister Tanaka's Visit

Following his tour of Mexico and Brazil and a stopover in Washington , Prime
Minister Tanaka paid an official visit to Canada from September 23 to 26, at the
invitation of Prime Minister Trudeau, and visited Ottawa, Toronto and Vancouver.
It was the first time in 13 years that a Japanese Prime Minister had visited
Canada since Prime Minister Ikeda visited that country in 1961 at the invitation
of Prime Minister Diefenbaker.

Consequent to a review of its traditional foreign policy which had centered
on very close relations with the United States, the Canadian Government under
Prime Minister Trudeau had been following a policy of promoting closer relations
with Japan and other Asian and Pacific as well as European countries to
diversify its diplomacy, and it attached great importance to Prime Minister
Tanaka's visit to Canada from this point of view.

In their two rounds of talks Prime Minister Tanaka and Prime Minister Trudeau
exchanged views on various matters, sharing the common view that exchanges
between Japan and Canada had been limited mainly to the economic and trade
field, and they should be expanded to include political, cultural, scientific
and technological as well as other fields to "broaden and strengthen
further the basis of Japan-Canada relations. " For this purpose , they
agreed to further utilize various forums for consultation between Japan and
Canada, such as the Japan-Canada Ministerial Committee. During the talks, Prime
Minister Tanaka extended an invitation to Prime Minister Trudeau to visit Japan,
which was accepted.

In the political field, the two leaders exchanged views on such problems as
cooperation among industrially advanced countries, the situation in the Asia-Pacific region over which both countries have great concern, the
disarmament question including nuclear disarmament, and consultations in the
forum of the United Nations and reaffirmed that they share a common
understanding over a wide range of problems.

As for economic relations, they exchanged views on various problems,
including problems both of a multilateral and bilateral nature. Concerning
problems of the world economy, they discussed in particular ways to cope with
inflation, the serious slowdown in economic growth, and difficulties in the
balance of payments. The two leaders agreed that the two countries should make
positive contributions to solving these problems. As for bilateral problems,
they discussed in the main how to promote relations of interdependence between
the two countries in a desirable direction and to their mutual advantage,
covering such subjects as upgrading the composition of Canadian exports to
Japan, problems concerning exports of primary products (such as minerals, energy
resources and agricultural products) to Japan, policies on foreign capital,
civil aviation, science and technology, atomic power, revision of the Agreement
on Commerce between Japan and Canada and the U.N. Conference on the Law of the
Sea.

The summit talks also discussed the question of furthering cultural
interchange from the standpoint of expanding and improving relations of
cooperation between the two countries. The two leaders agreed on the need for
efforts to increase mutual understanding between the two countries at all levels
in order to promote mutual understanding. It was decided to establish funds of
about $1 million each in both countries mainly for the purpose of promoting
studies on Japan in Canada and studies on Canada in Japan. It was also decided
to hold negotiations for the conclusion of a cultural agreement for the further
expansion of cultural interchange between the two countries.

Thus, Prime Minister Tanaka's visit to Canada was an epoch-making event in
Japan-Canada relations, and the success in laying the foundation for the
promotion of closer relations and cooperation between the two countries can be
regarded as a great achievement of his visit to Canada.

3. Central and South America

Japan maintains traditionally friendly relations with the countries of
Central and South America and no serious political problems exist between them.
The further strengthening and expansion of reciprocally beneficial and stable
relations of mutual cooperation is the basic objective of Japan's diplomacy
toward Central and South America, and its diplomatic efforts have always been
based on this recognition.

In 1974, there was no major political turmoil in the Central and South American
countries, and their national economic and social development continued to make
great progress despite the worsening of the international economic environment.
It is the Central and South American countries' top priority policy objective at
present to improve national welfare and national capabilities and strengthen
their international position through the promotion of national economic and
social development. The Central and South American countries are strongly aware
of their leadership role among the developing countries amid the
multipolarization of world politics and the world economy. They have also been
making efforts to promote close and broad relations with Japan, West European
countries and other advanced countries in order to free themselves from their
traditional dependence on the United States.

Under these circumstances, relations between Japan and the Central and South
American countries in recent years have developed steadily, and a broad
interchange in various fields, including people-to-people contacts, economic
relations and cultural interchange, has become quite active.

With the development of closer relations as the background, Prime Minister
Tanaka visited Mexico and Brazil in September 1974. It was the first visit to
Central and South America by a Japanese Prime Minister since that of Prime
Minister Kishi in 1959, and Prime Minister Tanaka was given a hearty welcome by
the leaders and peoples of Mexico and Brazil. The Prime Minister held several
talks with the Presidents of both countries and had a frank and fruitful
exchange of views with them not only on bilateral relations of cooperation but
also on a wide range of problems that call for international cooperation.

The Central and South American countries have stepped up their diplomatic
activities with Japan, and Prime Minister Pindling of the Commonwealth of the
Bahamas Prime Minister Williams of Trinidadand Tobago, Deputy Prime Minister
Talma of Barbados, former President Pastrana of Colombia and cabinet ministers
and missions of other countries of the region visited Japan in rapid succession.

As for economic relations, Japan's trade with Central and South America in
1974 increased 84 per cent in exports over the preceding year and 39 per cent in
imports. Japan's direct private investments in that region have increased
sharply in recent years, and it has been since 1973 the largest investment
market among the developing regions for Japanese capital. Japanese investments
in that region totaled $2,400 million as of the end of 1974, or about 20 per
cent of all Japanese investments abroad.

Such active economic interchange owes much to the activities of Japanese
private enterprises, which stands in contrast to Japan's economic interchange
with other developing regions. This can be ascribed to such reasons as the
steady growth of the economy of Central and South America , the existence of
communities of citizens of Japanese ancestry with a total population of 800,000,
and the high regard with which the citizens of Japanese ancestry are held in
various parts of the region and also the complementary economic relations
between this region, which has abundant untapped resources, and Japan, which has
advanced technology. This can also be attributed to Japan's various efforts,
including the maintenance of traditionally friendly relations and the promotion
of mutual understanding through diplomacy, economic and technical cooperation on
a government-to-government basis, and the promotion of cultural interchange.

4. Western Europe

(1) Present State and Problems of Japan-Europe Relations

Relations between Japan and Western Europe in recent years have shown a
tendency toward developing closer ties in the political and economic fields as a
result of the growing international importance on both sides. Japan and the West
European countries, together with the United States, are the principal members
of the industrially advanced democracies, and there is a growing need to
strengthen further cooperation between them to deal with the important
international political and economic problems.

In 1974, international efforts were made to build up new and harmonious
international relations amid the fluid international political situation and the
uncertainty over the course of the world economy brought about through the oil
crisis. Dialogue and cooperation between Japan and the West European countries
in the political and economic fields were pursued closely through forums for
bilateral and multilateral consulations.

As for bilateral interchange at the summit level, Prime Minister Tanaka held
talks with the top leaders of Britain, the Federal Republic of Germany and
France on the occasion of his visit to France in April to attend the state
funeral for President Pompidou. Deputy Prime Minister Miki also visited France
and Britain between April and May, and Foreign Minister Kimura visited Britain
in October when he attended the meeting of Japanese ambassadors in Europe.
International Trade and Industry Minister Nakasone also visited Britain in
January. The foreign ministers of the Federal Republic of Germany, France,
Sweden, Norway and Belgium paid visits to Japan for regular consultations or on
other occasions and exchanged views not only on bilateral relations with Japan
but also on a wide range of important international problems. The British
Minister for Industrial Development also visited Japan in order to follow up
Prime Minister Tanaka's visit to Britain in the autumn of 1973.

However, the present state of relations between Japan and Western Europe is
not yet fully satisfactory when viewed in contrast to their respective positions
in world politics and the world economy. Therefore it is necessary to make more
efforts for developing even closer ties.

In the economic field, there still exist various difficulties in expanding
economic interchange between Japan and Europe, such as misgivings among West
European countries over sharply increased exports of certain Japanese products
and the existence of import restrictions on a considerable number of Japanese
goods. Japan intends to overcome these obstacles and continue making sincere
efforts for the development of economic relations with Europe in the form of an
expanded equilibrium. Furthermore, it also intends to promote concrete
cooperation in wide-ranging areas, such as science and technology, energy, and
development cooperation in third countries.

In the political field, the West European countries are important members of
the free world and it is expected that they will endeavor to increase their
international influence through promoting the strengthening of regional
political cooperation aimed at eventual political integration of the European
Community. They are indeed making efforts, while going through various twists
and turns to coordinate their views, on important international political
problems, such as their policies toward the Middle East, the Conference on
Security and Cooperation in Europe and the Cyprus problem. Considering these
facts, it is necessary for Japan to increase interchange with them at all levels
and to hold close consultaions.

To build close relations between Japan and Western Europe on a firm basis, it
is indispensable to promote a better understanding of each other's culture,
national character and traditions, and therefore more active cultural
interchange is desired. In this context, it is regrettable that a series of
illegal acts by groups of Japanese radicals, including the attack against the
French Embassy in The Hague in September 1974, brought about an unfortunate
situation in which it was feared that Japan's steady postwar efforts to promote
Europe's understanding of Japan might suffer a setback , at least temporarily.

5. The Soviet Union and Eastern Europe

(1) The Soviet Union

(A) Japan-Soviet Relations in General

Although Japan and the Soviet Union differ from each other in their political
ideologies and social systems, the Soviet Union is an important neighbor of
Japan. It is, therefore, the keynote of Japan's policy toward the Soviet Union
to build up lasting relations of good-neighborliness and friendship on the basis
of reciprocity and equality.

Japan considers that the establishment of such relations between Japan and
the Soviet Union is beneficial not only to the mutual interest of the peoples of
both countries but is an essential factor for peace and stability in the Far
East.

Upon this basic position, Japan has endeavored to develop its relations with
the Soviet Union, and smooth progress has been made in their relations in a wide
range of areas, such as economy, trade, culture and person-to-person contacts
since the resumption of diplomatic relations in 1956. Progress in the economic
and trade fields has been particularly remarkable in recent years. Two-way trade
in 1974 exceeded $2, 500 million compared with only about $4 million in 1956
and, as for Japan's cooperation in Siberian development, several development
projects have been realized since 1969. A feature of the recent projects is that
their scale is large. In the field of person-to-person contacts between Japan
and the Soviet Union, the exchange of visits by people in various fields,
including high-ranking officials of both countries, has increased, thereby
contributing to the promotion of mutual understanding between the two countries.

Although Japan-Soviet relations have made progress in various fields, there
are some important problems still unsettled between Japan and the Soviet Union.
The greatest pending issue is the conclusion of a Japan-Soviet peace treaty by
realizing the return to Japan of the four northern islands, namely, the Habomai
island group and the islands of Shikotan, Kunashiri and Etorofu. The Japan-Soviet summit talks in October 1973 confirmed that this northern
territorial issue is an unresolved issue pending between the two countries since
World War II. On the basis of the results of the summit talks mentioned
above, Foreign Minister Miyazawa visited the Soviet Union in January 1975 and
continued negotiations for the conclusion of a peace treaty with Foreign
Minister Gromyko. An outline of the negotiations is given in (C) below.

Besides, there are several problems stemming from the fact that a peace
treaty has yet to be concluded between Japan and the Soviet Union because the
territorial issue remains unresolved. These problems include the frequent
seizure of Japanese fishing boats in waters around the northern territories,
visits by Japanese to the graves of their relatives in the northern territories,
etc.

In addition, there are such problems as the holding of annual negotiations
for setting quotas for salmon, trout, crab, tsubu (prosobranchia) and
other marine products, fishing operations by Soviet vessels in waters off the
coast of Japan and the repatriation of Japanese still forced to live in the
Soviet Union. Japan has been making constant efforts to solve these problems
through diplomatic channels, and has been endeavoring to achieve a fundamental
solution to these problems on the occasion of talks between high-ranking
officials of the two countries, such as the Foreign Ministers.

(B) Exchange of Letters between Japanese and Soviet Leaders

(a) In March 1974, Prime Minister Tanaka sent a letter to General Secretary
Brezhnev of the Communist Party of the Soviet Union in reply to the General
Secretary's message conveyed to the Prime Minister on February 14 through the
Soviet Ambassador to Japan. The letter was personally handed to General
Secretary Brezhnev by the Japanese Ambassador to the Soviet Union on March 21.
In his letter, Prime Minister Tanaka reaffirmed the Japanese Government's basic
attitude toward Japan-Soviet relations as a whole and clarified Japan's views on
the diplomatic schedule between the two countries, including negotiations for a
peace treaty. It also expressed the Prime Minister's intention of continuing his
dialogue with General Secretary Brezhnev and reconfirmed his invitation to the
General Secretary to visit Japan.

(b) Prime Minister Tanaka received General Secretary Brezhnev's letter
addressed to him through the Soviet Ambassador to Japan on April 11. The letter
expressed the attitude of the Soviet Union in reply to Japan's views on the
promotion of Japan-Soviet relations, including the conclusion of a peace treaty,
mentioned in (a) above.

(c) On October 16, Prime Minister Tanaka received General Secretary
Brezhnev's letter through Soviet Ambassador Troyanovsky. The letter reaffirmed
the Soviet Union's policy concerning the promotion of friendly relations with
Japan and stated to the effect that the Soviet Union attached importance to
contacts between the leaders of Japan and the Soviet Union. In the letter,
General Secretary Brezhnev further stated that he was expecting Foreign Minister
Kimura's visit to the Soviet Union for a continuation of the negotiations for
the conclusion of a Japan-Soviet peace treaty.

(d) On January 17, 1975, Foreign Minister Miyazawa, who was then in the
Soviet Union on an official visit, handed to Chairman Podgorny of the Presidium
of the Supreme Soviet a letter by Prime Minister Miki
addressed to General Secretary Brezhnev on the occasion of his meeting with the
Chairman and requested him to deliver it to the General Secretary. It was the
first letter ever sent to a Soviet leader by Prime Minister Miki. In the letter,
Prime Minister Miki stated to the effect that Japan's foreign policy remained
unchanged and, therefore, the basis of Japan's policy toward the Soviet Union,
which was directed to the development of good neighborly relations with the
Soviet Union, also remained unchanged. It also stressed the importance of
concluding a peace treaty by solving the unresolved issue still pending between
Japan and the Soviet Union.

(C) Foreign Minister Miyazawa's Visit to the Soviet Union

Foreign Minister Miyazawa paid an official visit to the Soviet Union from
January 15 to 17, 1974, at the invitation of the Soviet Government. The Foreign
Minister's visit was made in accordance with the agreement to continue
negotiations between Japan and the Soviet Union for the conclusion of a peace
treaty, which was reached on the occasion of the Japan-Soviet summit talks in
Moscow in October 1973.Therefore, its main purpose was the continuation of
negotiations for the conclusion of a peace treaty by settling the northern
territorial issue. On the occasion of the visit, Foreign Ministers of both
countries exchanged views on other matters pending between Japan and the Soviet
Union.

(a) The northern territorial issue (negotiations for a peace treaty)

On the basis of the results of Prime Minister Tanaka's visit to the Soviet
Union, Foreign Minister Miyazawa, during four rounds of talks with Foreign
Minister Gromyko, strongly urged the Soviet Union to return the four northern
islands, which are inherent territories of Japan. Although Foreign Minister
Gromyko did not take the attitude that the territorial issue was already
settled, he insisted that Japan should settle the issue by taking a realistic
attitude. Foreign Minister Miyazawa maintained that it was essential for the
establishment of solid good-neighborly relations between the two countries to
conclude a peace treaty by solving the territorial issue, the obstacle delaying
further development between the two countries, and that this was indeed a
realistic attitude and repeatedly urged the Soviet Union to make a decision.
However, the Soviet Union's stand on the reversion of the four northern islands
remained firm.

As a result of these negotiations, both sides reaffirmed the relevant clause
of the Japan-Soviet joint communique dated October 10, 1973, stipulating that
they would conclude a peace treaty by settling questions unresolved since World
War II, and agreed to continue negotiations on this question on the basis of
their common recognition that it was desirable to conclude a peace treaty at an
early date. It was also agreed that Foreign Minister Gromyko would visit Japan
within 1975 at the invitation of the Japanese Government, and this was mentioned
expressly, together with the other matters mentioned above, in the joint
announcement.

(b) Other problems between Japan and the Soviet Union

(i) Safe fishing operations

To secure safe fishing operations by Japanese fishermen and prevent those
unhappy incidents involving the seizure of Japanese fishing boats in waters
around the northern territories, Foreign Minister Miyazawa urged that the Soviet
Union, from a humanitarian viewpoint, take positive action for promoting the
negotiations for the conclusion of an agreement on this question, as a
provisional measure until the conclusion of a peace treaty. At the same time, he
strongly called for the release of all Japanese fishermen being detained in the
Soviet Union. Foreign Minister Gromyko stated that the Soviet Union was prepared
to resume negotiations on the problem of safe fishing operations. As for the
release of Japanese fishermen being detained in the Soviet Union, Chairman
Podgorny of the Presidium of the Supreme Soviet informed Foreign Minister
Miyazawa, during their talks on January 17, of the Soviet Union's decision to
release all Japanese fishermen. As a result, 15 Japanese fishermen detained in
the Soviet Union were released and returned to Japan between late January and
early February.

(ii) Operations of Soviet fishing fleets in waters off the Japanese coast

In recent years, many Soviet fishing fleets have begun to operate in waters
off the Japanese coast and as a result many incidents where Japanese fishermen
have suffered great damage to their fishing gear and other equipment have
occurred. Foreign Minister Miyazawa drew Foreign Minister Gromyko's attention to
this fad and requested the Soviet Union to refrain from fishing in these areas
in order to prevent further incidents. Foreign Minister Gromyko promised to
convey the Japanese request to the authorities concerned.

(iii) Problems of visiting graves and of non-repatriated Japanese

Foreign
Minister Miyazawa requested the Soviet Union to give humanitarian consideration
to the realization of the wishes of many Japanese to visit the graves of their
relatives in the northern territories, Sakhalin and the mainland of the Soviet
Union. He also requested the Soviet Union to take action from a humanitarian
point of view to realize the repatriation of Japanese remaining in the mainland
of the Soviet Union and Sakhalin since the end of the war and wishing to return
to Japan. Foreign Minister Gromyko replied that the Soviet Union was prepared to
consider the question of visits to graves if specific requests were made by the
Japanese side and that, if there were such Japanese who wished to return to
Japan, the Soviet Union would not prevent them from returning to Japan and that
it would give positive consideration if specific requests were made by those who
wished to do so.

(2) Eastern Europe

Although the political, economic and social systems of Japan are different
from those of the countries of Eastern Europe, Japan has been endeavoring to
maintain and promote friendly relations with those countries from the basic
standpoint of expanding the foundation of its diplomacy and promoting broad-ranged international relations.

In their efforts to raise their standards of living and step up economic
development, some of the East European countries on their part have come to need
advanced industrial technology from the West, and with the growing recognition
of Japan's rapid economic development in recent years have taken an active
attitude toward the promotion of closer trade and economic relations with Japan.
Reflecting this situation, trade between Japan and the East European countries
has increased year after year, with the value of their trade in 1974 increased
to $1,030 million or a growth of 85 per cent over the preceding year, a rate of
growth much higher than that of Japan's global trade and that of the total trade
of the East European countries. As the total value of trade has sharply
increased, the excess of Japan's exports over imports has grown, thereby causing
a considerable imbalance in trade with some East European countries. To promote
imports from those countries, the Government sent trade promotion missions to
Poland and Rumania. Non-governmental Japanese economic committees organized to
promote relations with respective countries in that region also discussed at
joint meetings with their counterparts in the East European countries the
promotion of imports from them and also industrial cooperation projects which
might contribute to balancing trade from a long-range point of view.

The East European countries are emerging as notable trading partners of Japan
partly because they are at present politically stable and comparatively
unaffected by the dislocation of the world economy.

It is to be noted that, in addition to trade relations, various kinds of
interchange, cultural as well as person-to person, have sharply increased
between Japan and the East European countries with the growth of interest in
each other.

6. Middle and Near East

Recognizing that Japan's relations with the countries of the Middle East have
become more and more important, Japan continued to call, in the year under
review, for peace and stability in the Middle East and endeavored to promote
relations of friendship and cooperation with those countries through cultural
interchange and economic and technical cooperation.

First, considering that the Middle East conflict was not a simple local
conflict and that it was seriously affecting the peace and prosperity of the
world, Japan has stressed at the United Nations and other forums the need to
achieve a lasting peace in the Middle East as soon as possible by bringing the
conflict to a just, lasting, and immediate settlement. Appeals to this effect
were also made in Prime Minister Miki's policy address and Foreign Minister
Miyazawa's foreign policy address to the 75th ordinary session of the Diet in
January 1975. That the Prime Minister referred to the Middle East problem in the
opening section of his speech clearly expressed to the world at large Japan's
deep concern in reaching a solution of this problem. Exchange of visits became
more active than ever before. In January through February, former Foreign
Minister Kosaka visited the eight countries of Morocco, Algeria, Tunisia, Libya,
Lebanon, Jordan, Sudan and Yemen as a special envoy of the Government. In
January, International Trade and Industry Minister Nakasone visited Iran and
Iraq, while Speaker of the House of Representatives Maeo visited Egypt and
Kuwait. In October, Education Minister Okuno visited Morocco. In November,
Foreign Minister Kimura visited Egypt as part of his tour of five African
countries. In January 1975, His Imperial Highness Prince Mikasa made an official
visit to Egypt at the invitation of the Egyptian Government.

From the Middle East countries, Belaid Abdessalam, Minister of Industry and
Energy of Algeria, and Ahmad Yamani, Minister of Petroleum and Mineral Resources
of Saudi Arabia, visited Japan in January 1974. In February, Dr. Abdul Kader
Hatem, Deputy Prime Minister of Egypt, visited Japan, followed by Crown Prince
Hassan of Jordan and Prince Shahram, nephew of the Shah of Iran, in May. Foreign
Minister of Tunisia, Habib Chatti, visited Japan in July, Minister for Economy
of Iraq, Hikmat Al-Azzawi, and Foreign Minister of Morocco, Ahmed Laraki, in
August, and Minister of Interior of Turkey, Oguzham Asilturk, in October. In
December, Minister of State of Baharain, Dr. Hussein Al-Baharna, special envoy
of the President of Afghanistan, Mohammed Naim, and special advisor to the
Sultan of Oman, Sayyed Thuwainy bin Shehab, visited Japan. These visitors
exchanged views with the leaders of Japan.

With this increase in exchanges of visits, economic and technical cooperation
between Japan and the Middle East countries has also made remarkable progress.
Japan concluded economic and technical cooperation agreements with Iraq in
August 1974 and with Saudi Arabia in March 1975. It exchanged notes on yen
credits with Egypt in July 1974 and Jordan and Algeria in December. Japan is
also holding talks with other countries in that region for various kinds of
economic and technical cooperation. Japan's agreement with Iran on the exemption
of visas went into force in October 1974.

In 1974, Japan opened embassies in the United Arab Emirates, the Kingdom of
Jordan and Qatar (Qatar is a concurrent ambassadorial post), in addition to the
15 diplomatic missions already existing in the Middle East region. The Foreign
Ministry created in the Middle East and African Affairs Bureau a post of Special
Assistant in charge of 11 countries located in the area east of Iraq (inclusive)
out of the 22 countries in the Middle East region, all of which had been, until
then, handled by the Middle East division. (In April 1975, the Ministry
established the Second Middle East Division to take charge of matters previously
handled by the Special Assistant. Consequently, the former Middle East Division
was reorganized as the First Middle East Division and it now takes charge of the
remaining 11 countries in the Middle East region.) The embassies of the Kingdom
of Jordan and the People's Democratic Republic of Yemen were established in
Tokyo.

7. Africa

(1) The situation in Africa in 1974 saw significant change evolving around
the long-standing question of southern Africa. In the meantime, Japan's
diplomacy toward Africa made great progress and it can be said that its
relations with Africa have entered a new era.

In this context, Foreign Minister Kimura's visit to the five African
countries of Ghana, Nigeria, Zaire, Tanzania and Egypt late in October through
November was an epoch-making event. The first official visit to Africa by a
Japanese Foreign Minister in office was timely because it took place at a time
when the problem of Portuguese colonies was drawing to an end and shortly before
the Lusaka Conference, which marked a shift in South Africa's policy to one of
easing tensions. The exchange of views at a high level with the leaders of the
host countries greatly promoted mutual understanding between Japan and Africa,
centering on the southern African question, and paved the way for the
establishment of a broad range of cooperative relations between Japan and the
countries of Africa.

(2) Needless to say, these achievements were the result in part of the
favorable influence exerted by the series of measures successively taken by
Japan in the past. For instance, Japan has consistently maintained the policy of
offering as much support as possible for a peaceful and prompt settlement of the
Southern African Question, as a central issue to the achievement of political
freedom and independence of the African people. In 1974, Japan took a series of
concrete steps as mentioned below to substantiate its position.

(A) Japan decided not to conduct interchange with South Africa in sports,
culture and education and not to issue visas to South African swishing to enter
Japan for such purposes. The measure was taken in accordance with the relevant
United Nations resolutions and put into force on June 15.

(B) Japan decided to take measures to prevent Japanese goods from entering
into Southern Rhodesia through third countries, and put into effect domestic
measures for that end on September 11 to observe the relevant United Nations
resolutions on sanctions even more rigidly.

(C) On August 1, Japan recognized the Republic of Guinea-Bissau ahead of the
West European countries. When provisionary governments were established as
interim measures leading to independence in Portuguese-administered areas, such
as Mozambique, Sao Tome and Principe, Cape Verde and Angola, Japan conveyed its
felicitations to them and made clear its stand of supporting the liberation of
colonies.

(3) Japan continued to strengthen its cooperation in the economic and social
development of African countries. In 1974 and through early 1975, Japan
exchanged notes with African countries on yen credits totaling about \9,100
million.

In connection with international relief activities for the countries of the
Sahelian region (covering the six west African countries of Senegal, Mali,
Mauritania, Upper Volta, Chad and Niger) which were affected by droughts that
seriously disrupted the life of the people of these countries, and caused
unprecedented damage, Japan contributed \500 million to the U.N. Food and
Agricultural Organization. It was made after Japan extended aid to Ethiopia in
March in connection with the drought in that country. Japan later extended
emergency relief to Kenya against an epidemic of cholera from a humanitarian
point of view. The Japanese aid was highly appreciated by the African countries
concerned and it helped improve the image of Japan among the African nations.

(4) Mutual understanding with Africa through person-to-person contacts also
increased. Foreign Minister Mwaanga of Zambia, who has been playing an important
role in settling the Southern Rhodesia problem, was invited to Japan in February
1975 as a Government guest and exchanged views with the Japanese side on matters
centering on the southern African situation. Gambian Foreign Minister N'jie and
many other high-ranking officials of ministerial level visited Japan and
deepened their knowledge of Japan.